Moat Warren Buffett – What to Consider When Filing My Taxes Online

Is e-filing really a much better way to file your taxes? 

Americans and the IRS might not agree about everything, but they’re largely on the same page when it comes to e-filing individual income tax returns.

The majority of individual income tax returns filed to the IRS are e-filed. 

When you e-file your federal income tax return, you save the IRS money because its workers do not need to spend time manually processing your return. And in return, you can find any refund you’re owed quicker, especially in the event that you have it directly deposited to your bank account.

However, what about safety?  And can digital filing actually provide you access to all of the forms that you may need in case you’ve got a intricate tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and if it may be the best filing choice for your requirements.

If you’re thinking about e-filing, some of the advantages include:

  1. Quick confirmation your forms are received: The IRS will confirm a tax filing was received within 24 hours of digital submission.  For paper filers, the IRS doesn’t send any acknowledgment that your forms have arrived . 

    Timely refunds: When you publish a paper filing, it can take six to eight months to be given a tax refund.  With e-filing, you’ll get your money in three weeks or less.  Choosing direct deposit may also accelerate the refund process.

  2. Reduced likelihood of errors: According to the IRS, there is approximately a 1 percent error rate on e-filed yields, compared with a 20% speed of errors on paper filings.  The IRS also provides more information on problems discovered on e-filed returns compared with paper yields.

  3. Easy payment process: If you owe the IRS money, it’s easier to pay at your convenience if you e-file.  You can submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to send the IRS what you owe on a date of your choosing again, as long as the IRS receives your payment by Tax Day. Additionally you have the choice to pay your balance by making use of the IRS Direct pay service from your checking or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order.  Just be aware delaying payment after the filing due date (typically April 15) will result in penalties and interest.

  4. Digital storage of tax information: Submitting returns electronically implies there is an electronic backup of your tax documents.  So if something happens to your paperwork, you’ll have an electronic backup.

The fantastic news: Most taxpayers do decide to e-file and get those advantages — and the practice of doing this is easy.

The way to e-file a tax return?

You have four options for filing an electronically filed tax return to the IRS.

    1. Use IRS Free File: If your adjusted gross income is $72,000 or not as you may have the ability to use the IRS Free File program.  The forms do the math for you and offer basic advice.  You can simply do your federal return with all these kinds. 
    2. Use an online tax preparation tax or service applications: Tax preparation software and online filing services are alternatives.  These options are an easy way to complete and e-file your forms.  Some software suppliers charge for their programs, Some are liberated.   The program asks you simple questions about your own life and finances to steer you through the completion of your forms.  
    3. Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  But eligibility for free help is normally restricted based on income, and some providers appeal to specific demographic groups.  The IRS maintains a record of authorized providers, but you should be aware this option is very likely to be the most costly one. 

Employing online tax preparation software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it anticipated over four in five tax returns to be submitted through tax return prep software.

Is e-filing really secure?

While e-filing is convenient, you could be worried about safety — especially with so many data breaches.  But experts agree that this is not a problem which should deter you from e-filing.

“E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and revenue at LegalShield. “In actuality, it can be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the email.”

Dennis Chow, vice president of data security at SCIS Security, explains that the IRS has put safety measures in place to keep your information secure.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All of this is routed over TLS encrypted links “

It is important to use a trustworthy service that will assist you file your taxes.  Chow advises to not e-file on a public computer or utilize an online connection that isn’t private.

Bottom line

For most taxpayers, it makes sense to e-file a yield because it’s the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment options.  Just make certain that you use tax planning software from a dependable source, so that you may make certain the information which you supply to transmit to the IRS will be kept protected.